A fall in the number of people with jobs could easily be taken as evidence that the labour market has run dry.

But it’s possible, and very tempting, to read too much into the monthly employment figures.

The fall of 4,800 in May followed three successively smaller monthly rises in employment.

The slowdown coincided with a fall in the labour force participation rate – the proportion of the working age population either employed or looking and ready to start.

Anyone not classed as participating in the labour is not counted as unemployed.

As a result the jobless rate has not risen, but instead been stuck at 5.8 per cent for the past three months.

The fall in participation, to 64.6 per cent in May from 64.9 per cent three months before, is about three times what could be explained by the ongoing retirement of the baby-boomer generation.

So most of it was probably caused by other factors including, possibly, the normal tendency of would-be workers to drop out of the labour market when job opportunities grow scarcer.

Trends in employment and participation therefore seem to be telling the same story of a softening labour market.

So it might actually be true.

But there’s a catch.

Monthly estimates from sample surveys – like the labour force figures from the Australian Bureau of Statistics – are notoriously plagued by random fluctuations.

And both of those problems tend to affect both employment and participation the same way – the volatility pushing employment and participation up and down together from one month to the next, the strength of the jobs market doing the same over longer time frames.

In other words, the simultaneous decline in employment and participation could be a sign of either a weak labour market or just “noise” in the data.

For economists, the resolution of this puzzle is critical.

The “noise” hypothesis would seem to fit with the idea that jobs growth is really stronger than the figures say it is, given the above-average pace of economic growth reported in the national accounts last week.

But the “slower jobs growth” view would be consistent with the idea that the growth spurt was short-lived and will not be sustained – as the Reserve Bank of Australia, for example, has predicted.

And it would be consistent with figures in the national accounts showing output per hour worked in the market sector of the economy – a key measure of labour productivity – growing at more than twice its long-run average pace over the latest two quarters.

When productivity is growing faster than normal, gross domestic product has to grow faster than normal just to generate normal employment growth and stop unemployment from rising.

But whether what we are seeing right now is statistical noise, slower economic growth causing slower jobs growth, or faster growth failing to create enough jobs, remains to be seen.